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October 14, 2015

Activist Hedge Fund Billionaire Pushes for Mitel, Polycom Combination


By Paula Bernier Executive Editor, TMC



Rumor has it that Elliott Associates, whose parent company has holdings in a wide array of tech companies, is pushing for a combination of Mitel and Polycom.


The hedge fund, which last week expanded its stake in Mitel by 2.31 million shares, earlier this month, filed a 13-D with the Securities and Exchange Commission disclosing a 5.84 million share stake in Polycom.

Paul Singer, the billionaire who heads up Elliott Management, which oversees Elliott Associates, reportedly also sent a letter to Mitel’s board of directors suggesting the combination of Mitel and Polycom.

Mitel declined to comment on a potential Polycom deal during an Oct. 14 interview with INTERNET TELEPHONY. The company did, however, issue a statement Oct. 8 in response to Elliott Associates’ recent filings on schedule 13-D. Mitel’s statement, however, did not mention Polycom. 

"We welcome Elliott Associates' interest and ongoing investment in Mitel,” the Mitel statement reads. “We have reviewed Elliott's recent filings on schedule 13-D and share their views as to consolidation opportunities in our industry. Mitel's senior management has consistently discussed its intention to consolidate the market, and in recent years has proactively leveraged M&A activity to successfully deliver shareholder value. As always, we look forward to creating further value for all Mitel shareholders."

Indeed, Mitel has been clear for some time that it sees itself as one of the consolidators of the unified communications space. In fact, that was the theme of Mitel CEO and President Richard D. McBee’s keynote speech at ITEXPO Miami back in January.

In April the company completed its acquisition of Mavenir, which is helping fuel the company’s new messaging about how smartphones have now become the center of the communications universe. The company has also in recent years snapped up a variety of other companies, and made a couple failed passes at ShoreTel.

In March of 2014 Mitel bought contact center company OAISYS. In January of 2014 it snapped up Aastra, which sells desk phones. Contact center company prairieFyre joined Mitel by way of a deal in June 2013. And Mitel brought Inter-Tel into the fold in April of 2007.

Polycom would strengthen Mitel’s position in the endpoint (desktop phones) space and on the video front. Indeed, Polycom is best known for its room-based videoconferencing solutions and has been talking about how it’s branching out into cloud-based video solutions as well. It’s also noteworthy that both Mitel (on the contact center front) and Polycom offer solutions related to Microsoft’s Skype for Business. Polycom was on stage with Microsoft last week at the Skype for Business event collocated with ITEXPO in Anaheim.

Adding Polycom to the mix would make Mitel the leader in the business endpoint space, Frank Stinson, a partner and senior analyst at IntelliCom Analytics, told INTERNET TELEPHONY in an interview today.

 “A lot of people have been predicting the demise of the endpoint, but that’s not been happening so far,” he said. 




Edited by Stefania Viscusi
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